Gov. Gavin Newsom pushes individual mandate for health insurance

Gov. Gavin Newsom, third from left, discusses his health care proposals at a roundtable discussion with small business owners Tuesday, May 14, 2019, in Sacramento, Calif. Newsom has launched a statewide tour to promote his plans which include requiring everyone to purchase health insurance and offering subsides to families of four with incomes as high as $150,000 a year. (AP Photo/Rich Pedroncelli)

Photo: Rich Pedroncelli / Associated Press

SACRAMENTO — Hoping to persuade lawmakers to support a state individual mandate for health coverage, Gov. Gavin Newsom said Tuesday that California needs to stabilize a health insurance market that has suffered a “kneecapping” by the Trump administration.

“Without the mandate, everybody’s premiums go up,” Newsom said. The Affordable Care Act “has been vandalized,” he added. “We’re here to get it back on firmer footing.”

Collecting cash penalties from adults who don’t carry health insurance is central to Newsom’s plan to offer health-care subsidies to people whose incomes now are too high to qualify. The requirement to carry insurance or pay a penalty when filing income taxes was part of the federal Affordable Care Act, but Republicans in Congress repealed it as part of their 2017 tax overhaul.

Meeting with small business owners at an enrollment location for Covered California, the state health insurance exchange, Newsom argued that expanded subsidies funded by the mandate penalty could reduce a major financial burden for business owners.

The Newsom administration estimates a state individual mandate would raise nearly $320 million next year from people who forgo buying health coverage. California would use the money to provide insurance subsidies to individuals and families making up to six times the poverty level — a higher ceiling for government assistance than any other state in the country.

Newsom said a person earning about $73,000 a year, or a family of four making as much as $150,000, could receive $100 a month to help pay for insurance. His budget plan includes expanded subsidies for only three years, but the governor says he wants to keep them indefinitely if California’s fiscal health holds up.

Newsom has proposed charging adults who forgo insurance $695 a year, or 2.5% of annual income, whichever is greater.

Sacramento was the first stop on a statewide tour Newsom plans to take this week to promote an expansive health care agenda that he introduced on his first day in office. The governor also wants to expand eligibility to Medi-Cal, the state’s health program for the poor, to undocumented immigrant adults up to age 26. He already has been developing a consortium of state agencies to negotiate with pharmaceutical companies for lower drug prices.

Several of his initiatives need approval through the budget process.

That will raise challenges for Newsom as he negotiates over the next month with lawmakers, who have their own policy priorities and some hesitation about supporting tax hikes.

“You don’t get everything you want. I see that as life. That’s a good thing,” Newsom said. “But a good thing is I’m increasing the number of tries. So if I don’t get two or three things, we’ve probably done more than most.

“But it’s not about me, it’s about them,” he added, nodding to the small-business owners sitting next to him. “You’re not denying me.”

Among them was Sydney Whitlock, whose company provides business services to other small firms. He said he had even sold a sales system to PlumpJack, Newsom’s wine company, “way back in the day.”

“I can’t always estimate what the income is going to be,” Whitlock said. “Last year, we had a great year. What did that do for us? It kicked us right out from where we could get a subsidy.”

He said he and his wife wanted to keep the health insurance plan they purchased through the state exchange. But they are now paying $18,000 a year for insurance, money that he can’t invest in his company.

Newsom said that’s the language Democratic presidential candidates should be using to build support for single-payer health care outside of their liberal base. On the campaign trail last year, Newsom expressed his desire for establishing a universal, government-run health system, though since taking office, he has moved the issue to the back burner.

“Honestly, I think one of the most compelling arguments for a single-payer financing system is how it completely unleashes the burden of small businesses,” Newsom said.

Alexei Koseff is a state Capitol reporter for The San Francisco Chronicle, covering Gov. Gavin Newsom and California government from Sacramento. He previously spent five years in the Capitol bureau of The Sacramento Bee, reporting on everything from international recruiting by the University of California to a ride service for state senators too drunk to drive. Alexei is a Bay Area native and attended Stanford University. He speaks fluent Spanish.